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Saturday, 20 July 2013

EU Ruling Will Stop State Aid to DAB Radio

DTT operators must pay back incompatible subsidies

The European Commission has concluded that a Spanish €260 million scheme to finance the digitisation and extension of the terrestrial television network in remote areas of Spain was incompatible with EU State aid rules. The measure favours the terrestrial digital technology to the detriment of others. The operators of terrestrial platforms received a selective advantage over their competitors using other technologies and therefore have to pay it back to the Spanish taxpayer.

This decision strongly indicates that any similar state aid scheme for the DAB radio platform also will be contested by the Commission. Especially as there are also competing technical system as DRM+, HD Radio and DVB-T.

In 2005, Spain decided to subsidise the transition to digital terrestrial television (DTT) in remote areas of Spain. The public financing also encompasses aid for the operation and maintenance of the DTT infrastructure. However, those subsidies went exclusively to terrestrial operators. Spain did not notify this project to the Commission. Alternative transmission platforms like satellite, cable or the internet could not effectively benefit from those subsidies although, for instance, the satellite platform would be available and suitable to cover the territory. Today, many commercial TV channels are already transmitted via the satellite platform.

In Member States that supported the digital switch-over in a technologically neutral way, other platform operators have successfully participated in open tenders. The Spanish measure, on the contrary, unduly distorts competition between DTT players and operators using other technologies. The former have received an undue advantage over their competitors and therefore need to return those unfair subsidies to the Spanish taxpayer.

In its decision on subsidies for the digital terrestrial TV in Berlin-Brandenburg, the Commission gave indications on how Member States could support the digital switchover in compliance with EU state aid rules. The Commission's decision in this case has been upheld by the EU General Court. The principle of technological neutrality has furthermore been confirmed in the General Court ruling on the Commission's decision in the Mediaset case .